Download - Pankaj Patel Sr Celebrity_endorsement
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 1/44
A
Seminar Report – II
Subject Code: 536421(36))
Submitted in the partial fulfillment for the award
of degree of
MASTER OF BUSINESS ADMINISTRATION (MBA)
of
Chhattisgarh Swami Vivekanand Technical UniversityBhilai (C.G.)
Session 2009-11
Guided by Submitted byDR. ANUP GHOSE PANKAJ PATELDesignation : Roll No 5053609110
Enrollment No AE6695MBA - IVSem.Sec.- “A”
DEPARTMENT OF MANAGEMENTDISHA INSTITUTE OF MANAGEMENT AND TECHNOLOGY
(Disha Education Society)Satya Vihar, Vidhansabha-Chandrakhuri Marg, Mandir Hasaud,
Raipur (C.G.)492007
1
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 2/44
INDEX
s.no Content Page.no
SEMINAR TOPIC -1
Measuring the impact of celebrity endorsement of
specific advertisement on product selection
1 Introduction 5
2 Celebrity branding & its effect n consumers 5
3 Relationship between a celebrity & a brand 7
4 Scope of acelebrity on incumbent brand 11
6 Compatability of celebrity persona 13
7 Successful celebrity endorsement 138 Celebrity attributes 15
9 Argument for celebrity endorsement 16
10 Argument against celebrity endorsement 18
11 Brand,celebrities & consumers 19
12 Selection of celebrity 20
13 Types of celebrity endorsement 22
14 Facts over the years 23
15 Celebrity endorsement as a strategy 23
16 Objectives of celebrity endorsement 24
17 Brand image and celebrity 25
18 Conclusion 26
INDEX
SEMINAR TOPIC -2
2
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 3/44
“ANALYTICAL STUDY OF SMALL
ENTERPRENEUR DEVELOPMENT”
1 Introduction 28
2 Enterpreneurship in india 30
3 Role of enterpreneurship in economic development 36
4 Factors affecting entrepreneurnial growth 37
5 Institutional finance to entrepreneurs 40
6 Conclusion 43
3
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 4/44
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 5/44
Choice of the celebrity, hence, is of utmost importance and is usually done based on many
different parameters - appeal, looks, popularity or even just a fantasy figure to endorse a brand.
In today's highly competitive markets, big brands are at logger-heads when it comes to products,
each having a similar product to that of a rival. Where does one brand gain that quintessential
advantage - advertising, service, promise of trust, or even the all important price factors?
Advertising seems to be the best platform where brands prefer to compete on - right from hiring
the best advertising agencies to getting the biggest celebrities. What would be the formula to
success then? Well, a good creative agency, a large enough promotional budget and a huge star
to endorse your brand would definitely ensure in the minds of a brand management team a
feeling of security, success and a triumph over the competitors brand.
The general belief among advertisers is that brand communication messages delivered by
celebrities and famous personalities generate a higher appeal, attention and recall than those
executed by non-celebrities. The quick message-reach and impact are all too essential in today's
highly competitive environment.
The different models applied by brands to achieve the full potential of such endorsements,
highlight the need for a convergence between the theoretical and pragmatic approaches of brand
building and effective advertising. The importance of a celebrity-brand match and the variousroles played by them as brand-associates show the momentum this strategy has gained in the last
decade or so. We put forward certain ideas like 'positioning by association', 'diminishing
celebrity utility' and the Multiplier Effect which show the triangular relationship between the
brand, the consumer and the celebrity.
India is a country where people are star-struck by film stars, cricketers, politicians, and even
criminals. Why? Populations of 1 billion and ticking, everyday people need something or
someone to look up to. A sense of security, admiration, comfort, familiarity, and above all,
someone they aspire to be at some hidden level in their lives. And clever marketers leverage this
very celebrity appeal and are successfully carrying out their jobs by giving the bottom lines of all
the brands what they want - profit, market share and even recall. But how much star power is too
5
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 6/44
much? "Does Amitabh really use Tide," asked a 6 year old to her mother. Her mother laughs and
says, "No way, just a gimmick." What does that do to the brand?
Now, despite the potential benefits derived from celebrity endorsements, they increase a
marketer's risk manifolds and should be treated with full attention and aptitude. A brand should
be cautious when employing celebrities to ensure promise believability and delivery of the
intended effect. The growing importance of mythical characters as celebrities and their sway
over the target segments are ample proof of public demand for icons to look up to. As the
celebrities traverse from a mere commercial presence to public welfare message endorsements, a
whole new dimension is added to this process and helps us in achieving a holistic view of the
impact which celebrities generate in every sphere and segment through their well-versed
endorsements.
At the end of the day, do any stakeholders in a company (employees, contractors, customers,
shareholders, communities the company supports with jobs) benefit from a celebrity
endorsement?
Does anyone buy a product because a Bollywood or TV actor/actress stands up and reads a script
in somewhat convincing manner? Are their distinctions in how consumers perceive these types
of endorsements and respond to them?
What happens when a celebrity endorser gets involved in a public scandal, or worse, dies? Will
the product lose consumer support or perish?
The most important thing to remember is that putting a celebrity in an ad is not an idea in itself.
Unfortunately, this is how most celebrities are being used in Indian advertising, where they just
become a prop. Ideally, there should be an idea that makes the celebrity relevant to the product
and the consumer. A celebrity's presence in the ad should be contextual.
Celebrity endorsement cannot guarantee fool-proof success. The celebrity endorsement strategy
must be integrated with target market characteristics, and the other elements of the marketing
mix such as product design, branding, packaging, and pricing. The message execution that will
be mouthed by the celebrity must likewise be made clear and single-minded. You can do this
6
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 7/44
cleverly by aligning the spirit of the brand to the product, or by using a celebrity because it
ensures that people will notice you, and hopefully remember what the brand is saying. Smart
associations are ones where the former happens.
Before we go into analyzing success and failure stories of brands, we examine the title once
again and try looking at it extremely minutely.
Relationship between a Celebrity & a Brand
When a consumer thinks about a brand, the link with the celebrity node is animated to a certain
level through spreading activation (Anderson 1983a). The joint activation of brand and celebrity
provides a path over which one's evaluation of the celebrity has an opportunity to transfer to the
brand. The key to the process is the simultaneous activation of the brand and celebrity nodes.
Negative information about the celebrity activates the celebrity node, which then activates the
brand node to some degree and allows reduced evaluation of the celebrity to transfer to the
brand. Studies by Noffsinger et al. (1983) and Judd et al. (1991) provide empirical evidence
demonstrating that attitudes can be affected in such a way.
It is also important to view the consumer in their social and cultural setting to further see how
celebrity endorsements increase sales and impact brands over time. Celebrities usually form a
very good example of a reference group appeal. This is particularly beneficial to a marketer and
a brand who can cash in on the success of the star and, hence, push his brand. People who idolize
7
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 8/44
their celebrities, hence, have a biased affinity to the brand their favorites endorse. As time passes
on, they believe that they by adopting the brand that their celebrity endorses are becoming more
like them. Celebrities can be used in four ways namely: testimonial, endorsement, actor and
spokesperson.
Right now the current hot favorite in India is roping in celebrities for social causes like pulse
polio, etc. This has shown to be having a positive effect on the people. In India, Bollywood and
sport personalities rule the mind-space and airwaves.
A recent study by FCB-ULKA was done on celebrity endorsements in India. Here, they
discussed two parameters: Compatibility Index and Trait Index when it came to finding the
relationship between a celebrity and a brand.
Compatibility Index meant that the consumers saw a suitable match between the brand and the
celebrity. Trait Index was based on the match between brand and celebrity personality traits. The
numbers showed that Compatibility Index was more favorable than Trait Index. E.g., Hrithik
Roshan scored high on his Compatibility Index (100) as compared to his Trait Index with Coca
Cola. But the end user being the consumer preferred him. The other startling fact was the high
points 93 and 100 by Salman Khan. But Thums-Up had to drop him after Salman's accident. But
people still associate Thums-Up with the Khan. The other important factor is unaided associationand Salman scored higher than other competition. But in the long run, to protect the brand
image, Salman was dropped. So what is important is the way the customer perceives a brand and
the celebrity, so if the celebrity is favored, it does have a positive influence over the brand. The
other
factor is the sheer image or popularity of the star, if the star's image is larger than life, for
example, for Amitabh Bachchan or Sachin Tendulkar, the Compatibility Index seems to be a
natural collorary.
Taking the millennium superstar Amitabh Bachchan, as an endorser, he fulfills all the FRED
objectives, namely, Familiarity (target market is aware of him, finds him friendly, likeable,
dependable and trustworthy); Relevance (which says that there should be a link between the
endorser and the product as well as between the endorser and the audience); Esteem (the polio
8
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 9/44
endorsement, for example, is successful as the masses see him as a credible name-face-voice);
Differentiation (in all his projections, he is seen to be one among the masses, and yet he towers
above them. He is different). His appeal is universal; lesser mortals merely cater to specific
niches. While there may be different reasons, depending on the category, the lifecycle stage in
which the brand is, and the particular marketing mantra being the flavor of the moment, the main
reason is to make the brand stand out and to facilitate instant awareness.
For example, in the much talked about Shah Rukh - Santro campaign, the organization wanted to
overcome the shortcoming of an unknown brand, Korean at that. The objective of the company
was to garner faster brand recognition, association and emotional unity with the target group.
The Santro ad showed the highest recall amongst auto ads, despite average media spends for the
category. Reason being simple - star power paid off.
Another example was the launch of Tamarind by S. Kumar, they reckoned they spent 40-50 per
cent less on media due to the sheer impact of using Hrithik Roshan who was riding on the 'Kaho
Na Pyar Hai' wave of Success. Ad recall was as high as 70 per cent, and even the normally
conservative trade got interested (so while a new brand would normally take 8-10 months for
entry into a Shopper's Stop, Tamarind was prominently displayed within 20 days of launch). But
now looking at the long term effects of Hrithik, his movies began to flop and it may seem a sheer co-incidence that the Tamarind brand died out as well.
Looking on the flip side, the biggest concerns from the advertiser's point of view is that of
'vampiring' - the celebrity being bigger than the brand. Consider the 1980s when Dinesh Suitings
chose Sunil Gavaskar as their brand endorser. Soon it was seen that Gavaskar completely
overshadowed the brand. A similar case was that of Shah Rukh and Mayur Suitings, where post
termination of the contract, the corporate had to vest crucial monies in a campaign where the
sole objective was to wean the brand identity off Shah Rukh Khan. So having a celebrity who
may outshine your product is not such a viable idea is the common consensus.
The other problem is that of duration of endorsement, and a possible mismatch between the
celebrity's life cycle and that of the brand. Owing to unavailability of dates, sometimes long-term
contracts are signed, but the celebrity's life might be over soon. Multiple endorsements are the
9
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 10/44
other problem. There is unfortunately a limited pool of celebrities who can resonate with
consumers. So you have the same celebrity endorsing several categories, as in case of Shah Rukh
and Sachin, who are completely over-exposed - one would assume a fair degree of confusion and
little room for credibility, and hence, a possible devaluing amongst customers.
Studying TV and print advertisements, one will realize that either some celebrities are endorsing
several brands or a specific brand is endorsed by different spokespersons. These concepts are
called multiple brand endorsement and multiple celebrity endorsement respectively.
The question is, does this special form of celebrity endorsement affects consumers' brand
attitudes? Following Tripp et al. (1994), the endorsement of as many as four products negatively
influences the celebrity spokesperson's credibility (i.e., expertise and trustworthiness) and
likeability. They further add that these effects are independent of the celebrity, i.e., the
perceptions of even well-liked stars can be influenced. Reasons may be found in the lack of
distinctiveness, with one famous person endorsing several products instead of concentrating on
and representing one specific brand. Though these findings may be valid, it does not
automatically mean that the concept of multiple product endorsement is useless. Further,
research is suggested on potential positive effects, like transfer of positive brand images, and on
the shape of consumers' response when more than four products are endorsed.
The Scope of a Celebrity on the Incumbent Brand
Simply stating, a brand is a differentiated product and helps in identifying your product and
making it stand out due to its name, design, style, symbol, color combination, or usually a mix of
all these
10
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 11/44
Before we can scrutinize the effects of celebrity endorsement on the overall brand, we have to
ferret the implicit nuances that act as sources of strong brand images or values: -
• Experience of Use: This encapsulates familiarity and proven reliability.
• User Associations: Brands acquire images from the type of people who are seen using
them. Images of prestige or success are imbibed when brands are associated with
glamorous personalities.
• Belief in Efficiency: Ranking from consumer associations, newspaper editorials, etc.
• Brand Appearance: Design of brand offers clues to quality and affects preferences.
• Manufacturer’s Name & Reputation: A prominent brand name (Sony, Kellogg’s,
Bajaj, Tata) transfers positive associations.
The celebrity’s role is the most explicit and profound in incarnating user associations among the
above mentioned points. To comprehend this, let us analyze the multiplier effect formula for a
successful brand: -
11
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 12/44
S=P* D*AV -- the multiplier effect
Where
S is a Successful Brand
P is an Effective Product
D is Distinctive Identity
AV is Added Values
The realm of the celebrity’s impact is confined to bestow a distinctive identity and provide AV
to the brand; the celebrity does not have the power to improve or debilitate the efficiency and
features of the core product. Thus, we are gradually approaching an evident proposition
claiming, "The health of a brand can definitely be improved up to some extent by celebrity
endorsement. But one has to remember that endorsing a celebrity is a means to an end and not
an end in itself."
An appropriately used celebrity can prove to be a massively powerful tool that magnifies the
effects of a campaign. But the aura of cautiousness should always be there. The fact to be
emphasised is that celebrities alone do not guarantee success, as consumers nowadays
understand advertising, know what advertising is, and how it works. People realize that
celebrities are being paid a lot of money for endorsements and this knowledge leads them tocynicism about celebrity endorsements.
Compatibility of the celebrity’s persona with the overall brand image
A celebrity is used to impart credibility and aspirational values to a brand, but the celebrity needs
to match the product. A good brand campaign idea and an intrinsic link between the celebrity
and the message are musts for a successful campaign. Celebrities are no doubt good at
generating attention, recall and positive attitudes towards advertising provided that they are
supporting a good idea and there is an explicit fit between them and the brand. On the other
12
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 13/44
hand, they are rendered useless when it comes to the actual efficiency of the core product,
creating positive attitudes to brands, purchase intentions and actual sales.
Certain parameters that postulate compatibility between the celebrity and brand image are
• Celebrity’s fit with the brand image.
• Celebrity—Target audience match
• Celebrity associated values.
• Costs of acquiring the celebrity.
• Celebrity—Product match.
• Celebrity controversy risk.
• Celebrity popularity.
• Celebrity availability.
• Celebrity physical attractiveness.
• Celebrity credibility.
• Celebrity prior endorsements.
• Whether celebrity is a brand user.
• Celebrity profession.
Successful Celebrity Endorsements for a Brand - An Indian Perspective
The latter part of the '80s saw the burgeoning of a new trend in India - brands started being
endorsed by celebrities. Hindi film and TV stars as well as sports-persons were roped in to
endorse prominent brands. Advertisements featuring stars like Tabassum (Prestige Pressure
Cooker), Jalal Agha (Pan Parag), Kapil Dev (Palmolive Shaving Cream) and Sunil Gavaskar
(Dinesh Suitings) became common. Of course, probably the first ad to cash in on star power in astrategic, long-term, mission statement kind of way was for Lux soap, a brand which has,
perhaps as a result of this, been among the top three in the country for much of its life-time.
In recent times, we had the Shah Rukh-Santro campaign with the objective of mitigating the
impediment that an unknown Korean brand faced in the Indian market. The objective was to
13
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 14/44
garner faster brand recognition, association and emotional unity with the target group. Star
power in India can be gauged by the successful endorsement done by Sharukh for three honchos
- Pepsi, Clinic All Clear and Santro.
Similarly, when S. Kumar's used Hrithik Roshan, then the hottest advertising icon for their
launch advertising for Tamarind, they reckoned they spent 40-50 per cent less on media due to
the sheer impact of using Hrithik. Ad recall was as high as 70 per cent, and even the normally
conservative trade got interested.
Confining to India, it would not be presumptuous to state that celebrity endorsements can
aggrandize the overall brand. We have numerous examples exemplifying this claim. A standard
example here is Coke, which, till recently, internationally didn't use stars at all - in fact, India
was a first for them. The result was a ubiquitously appealing Aamir cheekily stating 'thanda
matlab coca cola' . The recall value for Nakshatra advertising is only due to the sensuous
Aishwarya. The Parker brand of pen, which by itself commands equity, used Amitabh Bachchan
to revitalize the brand in India. According to Pooja Jain, Director, Luxor Writing Instruments
Ltd. (LWIL), post-Bachchan Parker's sales have increased by about 30 per cent.
India is one country which has always idolized the species of the celluloid world. Therefore, it
makes tremendous sense for a brand to procure a celebrity for its endorsement. In India, there isan exponential potential for a celebrity endorsement to be perceived as genuinely relevant,
thereby, motivating consumers to go in for the product - this would especially prove true if the
endorser and the category are a natural lifestyle fit (sports-persons and foot-wear, Kapil-Sachin
and Boost, film stars and beauty products).
Some Global Examples
Globally, firms have been juxtaposing their brands and themselves with celebrity endorsers.
Some successful ongoing global endorsements are as follows: -
14
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 15/44
• Celebrity endorsements have been the bedrock of Pepsi's advertising. Over the years,
Pepsi has used and continues to use a number of celebrities for general market and targeted
advertising, including Shaquille O'Neal, Mary J. Blige, Wyclef Jean, and Busta Rhymes, who
did a targeted campaign for their Mountain Dew product
• George Foreman for Meineke. He has also sold more than 10 million Lean Mean Fat-
Reducing Grilling Machines since signing with the manufacturing company
• James Earl Jones for Verizon and CNN
• Nike golf balls, since the company signed Tiger Woods in 1996, have seen a $ 50 million
revenue growth. Nike's golf line grossed more than $ 250 million in annual sales. In 2000, he re-
negotiated a five-year contract estimated at $ 125 million.
• Other successful endorsements like Nike - Michael Jordan, Dunlop - John McEnroe,
Adidas - Prince Naseem Hamed, and so on
Celebrity attributes that influence endorsement effectiveness
Previous research examining the effectiveness of celebrity endorsements has focused primarily
on personal attributes of the celebrity that enhance his or her persuasiveness For example, a
number of researchers have used models in which “source credibility”, typically viewed as a
function of trustworthiness and expertise, is the primary factor determining how influential the
endorser will be Trustworthiness refers to the general believability of the endorser, and is thus
broader but conceptually similar to correspondent inferences about the endorser. Expertise refers
to the product knowledge of the endorser and thus to the validity of his or her claims regarding
the product, and is believed to be a factor that increases persuasiveness above and beyond the
effects of trustworthiness. H3.=Perceived product knowledge of the endorser will be positively
associated with attitudes toward the advertised product.Other researchers have emphasized the
importance of source attractiveness in determining liking for the endorser and thereby increasing
endorsement effectiveness To the extent that attractiveness is an important determinant of
endorsement effectiveness, research based on the matchup hypothesis for a discussion of the
matchup hypothesis in relation to endorser expertise) suggests that its importance is limited by
the degree to which attractiveness “fits” well with the advertised product Thus, for example,
physical attractiveness might be useful when selling cosmetics but not when selling computers.
15
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 16/44
Furthermore, although source attractiveness research has focused primarily on physical
attractiveness, attractiveness can also be viewed more generally as a positive attitude toward the
endorser. Such positive attitudes might result from admiration or perceived similarity although
effective advertising is more likely to rely on the admiration component because the influential
power of celebrities is closely connected to their status as role models.
The argument for Celebrity Endorsement
Brands have been leveraging celebrity appeal for a long time. Across categories, whether in
products or services, more and more brands are banking on the mass appeal of celebrities. As
soon as a new face ascends the popularity charts, advertisers queue up to have it splashed all
over. Witness the spectacular rise of Sania Mirza and Irfan Pathan in endorsements in a matter of
a few months. The accruement of celebrity endorsements can be justified by the following
advantages that are bestowed on the overall brand:
• Establishment of Credibility: Approval of a brand by a star fosters a sense of trust for
that brand among the target audience- this is especially true in case of new products. We
had the Shah Rukh-Santro campaign. At launch, Shah Rukh Khan endorsed Santro and
this ensured that brand awareness was created in a market, which did not even know the
brand.• Ensured Attention: Celebrities ensure attention of the target group by breaking the
clutter of advertisements and making the ad and the brand more noticeable.
• PR coverage: is another reason for using celebrities. Managers perceive celebrities as
topical, which create high PR coverage. A good example of integrated celebrity
campaigns is one of the World’s leading pop groups, the Spice Girls, who have not only
appeared in advertisements for Pepsi, but also in product launching and PR events.
• Time saving : Celebrity is able to build brand credibility in a short period of time.
• Higher degree of recall : People tend to commensurate the personalities of the celebrity
with the brand thereby increasing the recall value. Golf champion Tiger Woods has
endorsed American Express, Rolex, and Nike. Actress Catherine Zeta-Jones is used by T-
Mobile and Elizabeth Arden. 007 Pierce Brosnan promotes Omega, BMW, and Noreico.
16
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 17/44
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 18/44
1. The reputation of the celebrity may derogate after he/she has endorsed the
product : Pepsi Cola's suffered with three tarnished celebrities - Mike Tyson, Madonna, and
Michael Jackson. Since the behaviour of the celebrities reflects on the brand, celebrity
endorsers may at times become liabilities to the brands they endorse.
2. The vampire effect : This terminology pertains to the issue of a celebrity
overshadowing the brand. If there is no congruency between the celebrity and the brand,
then the audience will remember the celebrity and not the brand. Examples are the
campaigns of Dawn French—Cable Association and Leonard Rossiter—Cinzano. Both of
these campaigns were aborted due to celebrities getting in the way of effective
communication. Another example could be the Castrol commercial featuring Rahul Dravid.
3. Inconsistency in the professional popularity of the celebrity: The celebrity may lose hisor her popularity due to some lapse in professional performances. For example, when
Tendulkar went through a prolonged lean patch recently, the inevitable question that
cropped up in corporate circles - is he actually worth it? The 2003 Cricket World Cup also
threw up the Shane Warne incident, which caught Pepsi off guard. With the Australian
cricketer testing positive for consuming banned substances and his subsequent withdrawal
from the event, bang in the middle of the event, PepsiCo - the presenting sponsor of the
World Cup 2003 - found itself on an uneasy wicket
3. Multi brand endorsements by the same celebrity would lead to overexposure: The
novelty of a celebrity endorsement gets diluted if he does too many advertisements. This
may be termed as commoditisation of celebrities, who are willing to endorse anything for
big bucks. Example, MRF was among the early sponsors of Tendulkar with its logo
emblazoned on his bat. But now Tendulkar endorses a myriad brands and the novelty of
the Tendulkar-MRF campaign has scaled down.
4.Celebrities endorsing one brand and using another (competitor)
: Sainsbury’s
encountered a problem with Catherina Zeta Jones, whom the company used for its recipe
advertisements, when she was caught shopping in Tesco. A similar case happened with
Britney Spears who endorsed one cola brand and was repeatedly caught drinking another
brand of cola on tape.
18
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 19/44
5. Mismatch between the celebrity and the image of the brand : Celebrities manifest a
certain persona for the audience. It is of paramount importance that there is an egalitarian
congruency between the persona of the celebrity and the image of the brand. Each
celebrity portrays a broad range of meanings, involving a specific personality and
lifestyle. Madonna, for example, is perceived as a tough, intense and modern women
associated with the lower middle class. The personality of Pierce Brosnan is best
characterized as the perfect gentlemen, whereas Jennifer Aniston has the image of the
‘good girl from next door’.
Brand, Celebrities & Consumer
Factors Impacting a Brand while being viewed by a Consumer in Media
The model above shows the various factors that affect a celebrity endorsed brand while viewed
by a consumer in the media (both TV and print). The central idea being the impact on brand. The
three major parts to a brand being shown are: -
The Product
Advertisement
19
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 20/44
The celebrity endorsing it
It is important is to study the relationship between these factors and how they together act for or
against the brand.
The product is important, of course, it may fulfill a need, want or a desire. Quality is
quintessential and, hence, nowadays it is understood the product is of highest quality. So what
next? The advertisement is important as a good product could see an early exit if the
advertisement is handled badly, and otherwise, a mediocre product which is tastefully handled
goes a long way. Lastly, the celebrity in the advertisement, recall, trust, familiarity are some of
the reasons that they are used. Now consider the interactions of these individual factors. The best
of superstars can be doing the advertisement but if the product is far from the image the star has,
the whole advertisement is a waste. Imagine an Amitabh doing an advertisement for ad for youth
apparel. Well, exceptions can be there but then again it depends on the way it is done.
Believability is of vital importance, the TVS Victor advertisement shows us the bike being
compared to the bat of Sachin and the strokes he plays. (Classically executed advertisement with
the bike and Sachin coming out as winners). The relationship between a product and its
advertisement again can be either dependant or none. In that case, a shock value makes people
remember the brand better and, hence, a possible long term loyalty.
Selection of Celebrity
Anyone who is famous may be the right celebrity. However, the appropriateness of the celebrity
largely depends on the product or service. Most advertisers insist that their celebrity
spokespeople have charisma and current popularity. That is why we see more movie and
television stars, athletes, real-life heroes, and musicians acting as brand ambassadors in the
market.
20
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 21/44
The choice of celebrity is critical for the success of the advertisement. The celebrity should have
high recognition, high positive affect, and the image of the celebrity must match with that of the
product. For this reason, famous sportsmen are used to endorse sporting goods: Michael Jordan
& Nike, Tiger Woods and Nike, David Beckham endorses Adidas, etc. While it is totally
inappropriate for movie stars to endorse a sports products.
Celebrity endorsements must be used judiciously. If the celebrity is too famous or too popular,
then the celebrity will overpower the product - i.e., people will remember seeing only the
celebrity and forget the product. This happened when Britney Spears came in a Pepsi
Commercial in 2001. Britney Spears was at the height of her popularity - viewers saw the
advertisement to see Britney Spears and forgot all about Pepsi. In India, Hollywood actress
Dimple Kapadia in a sexy swim wear was used in a Cinthol soap advertisement - People
remember seeing the actress - but the soap was forgotten.
The cost benefit analysis of using celebrity in marketing communications is bit tricky. But the
general belief is that using celebrity is a lot cheaper in building a brand. For example, S.Kumar’s
built the brand "Reed & Taylor’s" as a premier suiting material by having Amitab Bachan in its
advertisements. To achieve the same without a celebrity would have taken longer time & more
money. In a span of less than two years after launch, the brand Reed & Taylor’s" has become the
second largest seller of cloth for men’s suits in India.
21
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 22/44
Selection of the right celebrity is crucial. The needs of the brand—rather than the fame of the
celebrity—should be the primary criteria when selecting a celebrity spokesperson. The
celebrity's physical attractiveness, values, and credibility also matter tremendously. However, it
would be suicidal to forget about the target audience.
Types of Celebrity Endorsements
Celebrity branding has many aspects. A slight change in the type of branding used can result in
either a great success or a dismal failure. Celebrity branding falls into five general categories:
• Testimonial: The celebrity acts as a spokesperson for the brand.
• Imported: The celebrity performs a role known to the audience.
• Invented: The celebrity plays a new, original role.
• Observer: The celebrity assumes the role of an observer commenting on the brand.
• Harnessed: The celebrity's image is integrated with the ad's storyline.
Facts over the Years
• Approximately 60-70% of all television commercials feature famous people.
• Aishwarya Rai had once endorsed 'Fuji-Film' camera rolls. The company made an
agreement with her to endorse their camera rolls. But, Aishwarya's magic did not work
there and they had to terminate the contract.
• Amitabh Bachchan (AB) was seen endorsing Maruti's Versa Car. The AB factor worked
wonders as far as generating curiosity was concerned but the actual product couldn't meet
the expectations of people, and hence, the endorsement strategy didn't work. He has been
used very effectively by Parker Pens, ICICI Bank and Cadbury's to name a few.
• Bata’s sales doubled soon after they adopted Rani Mukherjee as their brand ambassador.
22
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 23/44
• Magic Johnson lost his endorsement deals when he announced in 1991 that he's HIV-
positive. It wasn't until July 2003 that he landed his first endorsement deal since the
announcement.
• Ticket sales at Wimbledon are known to have shot up significantly for all matches
featuring the latest 'sex-symbol' on the circuit - Anna Kournikova. An average player
who is yet to win even a single tennis tournament, Anna is known to have earned far
more from endorsements than her tennis career could ever have given her.
Celebrity Endorsements as a Strategy
How Tiger Woods’s endorsement of Accenture is beneficial to the company in sending the
message of high performance. This is just an example of having celebrity endorsement.Marketers of consumer products have long used celebrities to endorse their product - and this has
become a common strategy. I therefore have chosen to write about the theory and the intentions
behind the strategy of using celebrity endorsements
Objectives of celebrity endorsement
Defining the objectives of the advertisements is the first step. In general, there are four major
objectives for any advertisement. Note that not all advertisements need to have all the objectives.
1. Establish the product need
stablishing a need for a product or a product category is the necessary first step. This is
more important in new-to-world category of products In Indian context, consider the
advertisement for Polio Immunization drive - the TV advertisement featured Amitab
Bachan telling that immunization is a must for every child - while people suffering from
polio are shown in the background along with healthy kids. This advertisement used a
celebrity to create the need for polio immunization.
Another good example is Toyota’s advertisement of Innova in India. The TV
23
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 24/44
advertisement prominently shows Amir Khan playing different roles while traveling in an
Innova. The different roles - establish the need for such a big car in India. ( Note that
Indian car market is dominated by small cars - which can seat only four adults, Toyota
wanted to establish the need for a 8 seater car in India)
2. Create Brand Awareness
Once the need for a product is established, customers must be able to associate the brand
with the product category. For example iPod is strongly associated with portable MP3
players, Nike with sports shoes etc..
A classic example of this is Nike’s use of Michael Jordan advertising for Nike. This
advertisement instantly created a strong association of Nike with basketball shoes.
3. Set customer expectations
Brand value comes from the customers experience with the product. If the product meets
or beats his expectations, then a positive brand image is created, else a negative brand
image is created. Therefore it is essential to set the customer expectations accordingly.
This is most common in established consumer products - Beauty products, household
cleaning products, food products etc.
4. Create a purchase intention
These are marketing promotion advertisements - Buy one, get one free, or get additionaldiscounts if you buy within a particular date etc.. The sole purpose of such
communication messages is to encourage customers to buy immediately or within a short
period after seeing
Use of celebrity endorsements to create a purchase intention has been very limited. This
24
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 25/44
is mainly because such advertisements adversely affect the personality brand value of the
celebrity. Being associated with a discount deal is not favorable image for the celebrity
and the customer.
Brand Image & Celebrity
Research has shown that there are three aspects that influence a customer's attitude and, hence,
the long term impact on the brand - Attractiveness, Trustworthiness and Expertise. The matrix
below shows us the images and the celebrities: -
Aspect of Brand Image Celebrity Product
Attractiveness Elegance Aishwarya Rai Nakshatra Diamonds
Beauty Madhuri Dixit Emami
Classy Saif and Soha Ali Khan Asian Paints-Royale
Stylish Saif Ali Khan Provogue
Amitabh Bachhan Reid & Taylor
Trustworthiness Honest Tarun Tejpal Tehelka
Reliable MS Dhoni TVS Star City
Expertise Knowledge Sachin & Sehwag Reebok
Qualified Rahul Dravid Gillette
CONCLUSION
25
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 26/44
Celebrities have always been the easiest way for a new product launch (consumer goods) and
will remain to do so in the near future on account of their mass appeal and a world full of star
stuck loyal fans. But the impact on the brand is much greater than just an advertisement showing
a celebrity.
We have seen that the correct choice of a celebrity can surely increase sales but when it comes to
long term loyalty and impact on the brand. The effect is yet somewhat debatable. In the end, the
product must deliver for the customer, no matter who endorses the product, if the customer does
not see himself getting value from his purchase, he will not buy it. But yes, celebrities over time
can influence the loyalty and make a person friendlier to a brand. Brand and celebrities are here
to stay for a long time and in this age of slick advertising and mass media and unthinkable
budgets, celebrities are having a field day charging huge amounts and making more money thantheir mainstream professions. But then do they really care about the brand? Or is it just the
money? But the bottom line, celebrity endorsements are here to stay.
When Aishwarya Rai appeals to the nation to donate their eyes while she personally pledges
them, she strikes a chord with millions of viewers. Shabana Azmi inspires a sense of tremendous
awe and respect while being shown as visiting HIV patients. No matter how much we raise a hue
and cry over one celebrity being all over the place and marketing just about everything, it still
works for most of us.
26
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 27/44
“ANALYTICAL STUDY OF SMALL
ENTERPRENEUR DEVELOPMENT”
ENTREPRENEUR
27
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 28/44
INTRODUCTION
The word ‘entrepreneur’ has been taken from the French language where it cradled and
originally meant to designate an organizer of musical or other entertainments. Oxford English
dictionary (in 1897) defined an entrepreneur, “the director or a manager of a public musical
institution, one who ‘get-up’ entertainment, especially musical performance”. In the early 16 th
century, it was applied to those who where engaged in military expedition. It was extended to
cover civil engineering activities such as construction and fortification in the 17 th century. It was
only in the beginning of the 18th century that the word was used to refer to economic aspects. It
this way, the evolution of the concept of entrepreneur is considered over more than four
centuries. Since than, the term ‘entrepreneur’ is used in various ways and various views. These
view are broadly classified into three groups, namely: -
• Entrepreneur as a risk-bearer.
• Entrepreneur as a organizer.
• Entrepreneur as a innovator.
CHARACTERSTICS OF AN ENTREPRENEUR
• Hard work
• Desire for high achievement
• Highly optimistic
• Independence
• Foresight
• Good organizer
• Innovative
FUNCTION OF AN ENTERPRENEUR
• Idea generation and scanning of the best suitable idea.
28
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 29/44
• Determination of the business objectives.
• Product analysis and market research.
• Determination of form of ownership/organization.
•
Completion of promotional formalities.• Raising necessary funds.
• Procuring machines and material.
• Recruitment of men.
• Undertaking the business operation.
ENTREPRENEURSHIP
INTRODUCTION
Different authors define entrepreneurship differently, some call it as ‘risk-bearing’, while some
call it as ‘innovating’ and some call it as ‘thrill-seeking’. Let us considered some important
definitions of entrepreneurship: -
In a conference on entrepreneurship held in United States, the term ‘entrepreneurship’ wasdefined as, “it is the attempt to create value through recognition of business opportunities, the
management of risk-taking appropriate to the opportunity, and through the communicative and
management skills to mobiles human, financial and material resources necessary to bring a
project to fruition”.
According to schumpter, “entrepreneurship is based on purposeful and systematic innovation. It
include not the independence businessman but also company directors and managers who
actually carry out innovative function”.
In the above definitions, entrepreneurship refers to the
functions performed by an entrepreneur in establishing an enterprise. Just as management
regarded as what managers do, entrepreneurship may be regarded as what entrepreneur do. In
29
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 30/44
other words, entrepreneurship is the act of being an entrepreneur entrepreneurship is the process
involving various actions to be undertaken to establish an enterprise. It thus, a process of giving
birth to new enterprise.
ENTERPRENEURSHIP IN INDIA
CURRENT PERSPECTIVE
In a country like India, social (value system) and cultural issues hold their importance besides
issues related to infrastructure. Any innovation to succeed in our society needs to be accepted by
our value systems and cultural issues. It will not be wrong to say that Dot.com (or any
innovation) will not succeed until and unless a high level of awareness is achieved and the idea
is taken to the common people. An acceptance by the mass in itself is a kind of social
innovation. Further, in our country, where the population is more concerned about making both
ends meet, entrepreneurial activity will achieve sustainability only when support is provided
both at the societal and governmental levels.
SCOPE OF ENTERPRENEURSHIP DEVELOPMENT IN INDIA
In India there is a dearth of quality people in industry, which demands high level of
entrepreneurship development programmer through out the country for the growth of Indian
economy.
The scope of entrepreneurship development in country like India is tremendous.
Especially since there is widespread concern that the acceleration in GDP growth in the post
reforms period has not been accompanied by a commensurate expansion in employment. Results
of the 57th round of the National Sample Survey Organization (NSSO) show that unemployment
figures in 2001-02 were as high as 8.9 million. Incidentally, one million more Indian joined the
rank of the unemployed between 2000-01 & 2001-02. The rising unemployment rate (9.2% 2004
est.) in India has resulted in growing frustration among the youth. In addition there is always
problem of underemployment. As a result, increasing the entrepreneurial activities in the country
is the only solace. Incidentally, both the reports prepared by Planning Commission to generate
30
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 31/44
employment opportunities for 10 crore people over the next ten years have strongly
recommended self-employment as a way-out for teaming unemployed youth.
We have all the requisite technical and knowledge base to take up the
entrepreneurial challenge. The success of Indian entrepreneurs in Silicon Valley is evident as
proof. The only thing that is lacking is confidence and mental preparation. We are more of a
reactive kind of a people. We need to get out of this and become more proactive. What is more
important than the skill and knowledge base is the courage to take the plunge. Our problem is we
do not stretch ourselves. However, it is appreciative that the current generations of youth do not
have hang-ups about the previous legacy and are willing to experiment. These are the people
who will bring about entrepreneurship in India.
We can take the example of Vikas Kedia - one of India's most eligible entrepreneurs; he was
barely 21 when he had turned his back on a possible $ 100,000-a-year job. Vikas Kedia, a
graduate from the Indian Institute of Management-Bangalore, is much in demand. He has also
created history of sorts in the IIM circuit by starting his own dot-com company in Bangalore,
now he has his own company which is a California and Kolkata based GRMtech
At present, there are various organizations at the country level & state
level offering support to entrepreneurs in various ways. The Govt. of India & various State
Govts. have been implementing various schemes & programmes aimed at nurturingentrepreneurship over last four decades. For example, MCED in Maharashtra provides
systematic training, dissemination of the information & data regarding all aspects of
entrepreneurship & conducting research in entrepreneurship. Then there are various Govt.
sponsored scheme for the budding entrepreneurs.
Recognizing the importance of the entrepreneur development in economic growth &
employment generation, Maharashtra Economic Development Council (MEDC) has identified
entrepreneurial development as the one of the focus area for Council activities two years ago.
Various Chambers of Commerce & apex institutions have started organizing seminars &
workshops to promote entrepreneurship. Incidentally, various management colleges have
incorporated entrepreneurship as part of their curriculum. This is indeed a good development.
This shows the commitment of the Govt. & the various organizations towards developing
31
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 32/44
entrepreneurial qualities in the individuals.
PROMOTING ENTERPRENEURSHIP
In India, where over 300 million people are living below the poverty line, it is simply impossible
for any government to provide means of livelihood to everyone. Such situations surely demand
for a continuous effort from the society, where the people are encouraged to come up with their
entrepreneurial initiative.
ENCOURAGEMENT AT ATTIDINAL AND SOCIAL LAVEL
In the future, innovation and entrepreneurship needs to be encouraged at Social levels,
Governmental levels and Managerial levels. There must be a social attitude that views
innovations with positive attitude and reject an innovation only when it is not acceptable.
ENCOURAGEMENT AT PHYSICAL LEVEL
At this level the encouragement will refer to two aspects necessary for entrepreneurship to
thrive, one is the provision of venture capital and the other being infrastructural support. A realexample is Export Processing Zones which are performing extremely well when given the
support.
WHAT WILL BE THE QUALITIES NEEDED TO SUCEED IN THIS NEW WORLD?
First and foremost, we need the entrepreneurial spirit. Outside India, this spirit has been very
evident in the IT industry. 35% of the start-ups in Silicon Valley are by Indians. We need to have
similar risk-taking ability within the country as well. Entrepreneurs need more than technical
talent, more than business savvy. What they need is the indefatigable energy and incurable
optimism that enables them to take the road less traveled and converts their dreams into reality.
It is a force that beckons an individual to pursue countless opportunities. Entrepreneurs must
32
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 33/44
learn how to overcome the risk of failure, or of vulnerability. The institutions can give them
valuable insights and also support them in this.
INDIAN ENTREPRENEURS
1) Dhirubhai Ambani: A proud son of this glorious state of Gujarat, and a man with long ties
with this wonderful city of Ahmedabad, was the greatest example of this spirit of
entrepreneurship!
In a short span of less than 25 years, and without even the benefit of a formal education,
Dhirubhai Ambani built Reliance, a first generation enterprise, into one of the world’s 200 most
profitablecompanies!
He started out in life, working as a mere petrol pump attendant in Aden, Yemen. He had no
technical knowledge, of any of the businesses he wished to create in India.
He had just five hundred rupees in his pocket, a vision of what he wanted to achieve, an intrinsic
faith in the latent demand potential of the Indian markets, a belief in the capabilities of Indian
people, and a burning desire to succeed!
The end result? He created Reliance, a Rs. 75,000 crore enterprise, in a single lifetime!
2) Azim H. PremjI: In a world where integrity purportedly counts for naught, Azim Hasham
Premji symbolizes just that. The 55-year-old Wipro chairman made international waves in 2000
ever since his group became a Rs 3,500-crore empire with a market capitalization exceeding Rs
500,000 million! If any stargazer had been foolish enough to predict in 1966 that a 21-year-old
Indian at Stanford University would one day achieve all this, he'd have been laughed out of
business. At that juncture, Premji was forced to discontinue his engineering studies in the States
due to the untimely death of his father. Returning to India to take charge of a cooking oil
company, the youth infused new life into the family's traditional mindset and trade.
Despite all the success, the media-shy Premji maintained a low profile, letting his work do all the
talking. Until early last year the media broke the story that Azim Premji had become the second-
33
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 34/44
richest man in the world… In spite of his billions, however, he still travels economy class .
3) N.R.Narayana Murthy: An Indian IT chief who's really made it big without dropping his
ethical precepts by the wayside is Nagawara Ramarao Narayana Murthy, Chairman of Infosys.
Born in 1946, Murthy's father was a schoolteacher in Kolar district, Karnataka, India. A bright
student, Murthy went on to acquire a degree in Electrical Engineering from Mysore University
and later studied Computer Science at the IIT, Kanpur, India.
The Infosys legend began in 1981 when Narayana Murthy dreamt of forming his own company,
along with six friends. There was a minor hitch, though-he didn't have any seed money. Luckily,
like many Indian women who save secretly without their husband's knowledge, his wife Sudha-
then an engineer with Tatas-had saved Rs 10,000. This was Murthy's first big break.
The decade until 1991 was a tough period when the couple lived in a one-room house. The
second break came in 1991 when Indian doors to liberalization were flung open… Murthy
grabbed the opportunity with both hands and has never looked back ever since. Today, Infosys is
the first Indian company to be listed on the US NASDAQ.
While working in France in the 1970s, Murthy was strongly influenced by socialism. The bubble
was pricked, however, when he was arrested in Bulgaria on espionage charges. Today, he says:"I'm a capitalist in mind, a socialist at heart." It was this belief in the distribution of wealth that
made Infosys one of the first Indian companies to offer employees stock-option plans. Infosys
now has 400 employees who are dollar millionaires.
Heading a company with the largest market capitalization hasn't changed Murthy's life-style
much. The man still doesn't know how to drive a car! On Saturdays-his driver's weekly his wife
drives off-the Infosys chief to the bus stop, from where he boards a company bus to work!
Incidentally, Sudha Murthy is now chief of the Infosys Foundation, which channels Rs 50
million into charity every year.
Simplicity, humility and maintaining a low profile are the hallmarks of this super-rich
34
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 35/44
Bangalorean. And the man is principled to a fault. Murthy's unprecedented wealth has catapulted
him into the public glare. After the kidnapping of Dr Rajkumar by forest brigand Veerappan, the
Home Ministry has sounded out the local government about providing Z-category security to
Murthy and Premji. Both characteristically turned down the offer.
In a letter to the police top brass last month, Murthy said he was a simple man who had no
intentions of annoying his neighbors and disturbing traffic with an intrusive entourage of
security vehicles and personnel.
FUTURE PERSPECTIVE
Entrepreneurship as in the past will determine technical innovations, status of social institutions
and political management systems. On the basis of these factors, we can expect the future to be a
place where basic needs will remain and only the wants will change. India will overcome the
barriers of infrastructure; we will also visualize a strong manufacturing and agricultural sector.
Entrepreneurs and not managers will be in demand, as only they will be equipped to find order in
chaos. The focus of entrepreneurial energy will shift from achieving volume sales to fulfill a
specific requirement. Governance will become more transparent and will be willing to acceptchanges necessary for growth and development. More autonomy will become the basis of all
issues.
The future will see Entrepreneurship as the key driver of economic development Technological
obsolescence will become order of the day and there will be more space for leisure. New
businesses will be credited with providing variety of new jobs in the economy. New and small
business will also develop more than their share of product and service innovation. At one end
we will see the technological upheavals in quick succession and on the other end there will be
social value systems and cultural issues undergoing slow but dynamic transformations.
ROLE OF ENTERPRENEURSHIP IN ECONOMIC DEVELOPMENT
35
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 36/44
The role of entrepreneurship in economic development varies from economy to economy
depending upon its material resource, industrial climate and responsiveness of the political
system to the entrepreneurial function. India which itself an underdeveloped country aims at
decentralized industrial structure to militate the regional imbalance in level of economic
development, small-scale entrepreneurship in such industrial structure Plays an important role to
achieve balanced regional development. The important role is as follows: -
• Entrepreneurship promotes capital formation by mobilising the idle saving of the public.
• It provides immediate large-scale employment. Thus, it helps reduce the unemployment
problem in the country i.e., the root of all socio economic problems.
• It helps reduce the concentration the economic power.
• It promotes balanced regional development.
• It stimulates the equitable redistribution of wealth, income and even political power in
the interest of the country.
• It encourages effective resource mobilization of capital and skill which might otherwise
remain unutilized and idle.
• It also induces backward and forward linkage, which stimulates the process of economic
development.
• Last but no means the least; it also promotes country export trade i.e., an important
ingredient to economic development.
Rural entrepreneurship
Like entrepreneurship, rural entrepreneurship also conjures different meaning to different
people. Without semantic, rural entrepreneurship can simply be defined as entrepreneurship
emerging in rural areas in rural entrepreneurship. In other words, establishing industrial units in
the rural areas refers to rural entrepreneurship. Or say, rural entrepreneurship implies rural
industrialsation.
36
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 37/44
FACTORS AFFECTING ENTREPRENEURNIAL GROWTH
ECONOMIC FACTORS
• Capital: capital is one of the important prerequisites to establish an enterprise.
Availability of capital facilitates the entrepreneur to bring together the land of one,
machine of another and raw material of yet another to combine them to produce goods.
Capital is, therefore, regarded as lubricant to the process of production.
• Labour: It is noticed that cheap labour is often less mobile or even immobile. And, the
potential advantages of lower-cost labour are negated by the deleterious effects of labour
immobility. It can be dealt by utilizing labour intensive methods. The disadvantages of
high-cost labour can be modified by introduction of labour saving innovation. Thus, it
appears that labour problem can be solved more easily than capital can be created.
• Raw material: The necessity of raw materials hardly needs any emphasis for
establishing any industrial activity and, therefore, its influence in the emergence of
entrepreneurship. In the absence of raw material, neither any enterprise can be
established nor an entrepreneur can be emerged.
• Market: The fact remain that the potential of the market constitutes the major
determinant of probable rewards from entrepreneurial function. If the proof of the
pudding lies in eating, the proof all production lies in consumption, i.e., marketing.
NON- ECONOMIC FACTORS
Social condition
• Legitimacy of entrepreneurship: The proponents of the non-economic factor give
emphasis to the relevance of the system of norms and values within a socio-cultural
setting for the emergence of entrepreneurship. In professional vocabulary, such system is
37
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 38/44
referred to as the ‘legitimacy of entrepreneurship in which the degree of approval or
disapproval granted entrepreneurial behavior influences its emergence. We do also
believe that entrepreneurship will be more likely to be emerging in setting in which
legitimacy is high. But, there are others two who took the opinion that entrepreneurship
can emerge even when entrepreneurial legitimacy is low or even negative provided that
the government action can overcome the negative orientations.
• Social mobility: social mobility involves the degree of mobility, both social and
geographical, and the nature of mobility channels within the system. The opinion that the
social mobility is crucial for entrepreneurial emergence is not unanimous. In contrast,
there is other group of scholars who express the view that the lack of mobility
possibilities promotes entrepreneurship. Some even speak of entrepreneurship coming
through crevices in a social system.
• Marginality: A group of scholars hold a strong view that social marginality also
promotes entrepreneurship. They believe that individuals or groups on the perimeter of a
given social system or between two social systems provide the personnel to assume the
entrepreneurial roles. They may be drawn from religious, culture, ethics, or migrant
minority groups, and their marginal social position generally believed to have psychological effects which make entrepreneurship particularly attractive for them.
• Security: Several scholars have advocated entrepreneurial security as an important
facilitator of entrepreneurial behaviors. We also regard security to be a significant factor
for entrepreneurship development. This is reasonable too because if individuals are
fearful of losing their economic assets or of being subjected to various negative
sanctions, they will not be inclined to increase their insecurity by behaving
entrepreneurially.
38
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 39/44
Psychological factors
• Need achievement: According to McClelland, constellation of personality characteristics
which are indicative of high need achievement is the major determinant of
entrepreneurship development. Therefore if the average level of need achievement in a
society is relatively high, one would expect a relatively high amount of entrepreneurship
development in that society.
• Withdrawal of status respect: Hagen believes that the initial condition leading to
eventual entrepreneurial behavior is the loss of status by the group. He postulates that
four types of events can produce status withdrawal:
1. The group may be displaced by force.
2. It may have its valued symbols denigrated.
3. It may drift into a situation of status inconsistency
4. It may not be accepted the expected status on migration in a new society.
Government action
The government by its action or failure to act also does influence both the economic and non-
economic factors for entrepreneurship. The supportive actions of the government appear as the
most conductive of the entrepreneurial growth. This true of the Indian entrepreneurship also. In
the societies where the government was committed to there economic development. One way of
examining the role of government in influencing entrepreneurship may be the extent to which
the government is a competitor with entrepreneurs from private sectors, whether for factors of
production or for market. The grater the extent of this competitive role, the less favorable the
opportunity conditions for private entrepreneurship will be.
39
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 40/44
OBJECTIVES OF EDPs
The objective of the Programme is to identify persons with entrepreneurial quality, to motivate
them and to train them through a structured training course so as to enable them to set up their
tiny and small-scale industrial ventures with the assistance available from different agencies. The
programmes undertaken under this Scheme are:-
• Identification, selection and motivation of potential entrepreneurs through intensive
campaign and seminars at a cost of Rs. 5000/- per programme and
• A training course at an expenditure of Rs.20, 000/- for 30 participants for duration of 4
weeks. The financing pattern was set in 1986 and an upward revision is presently under
consideration
COURSE CONTENTS AND CURRICULUM OF EDPs
• General introduction to entrepreneurship.
• Motivation training.
• Management skills.
• Support system and training
• Fundamentals of projects feasibility study.
• Plant visits.
INSTITUTIONAL FINANCE TO ENTREPRENEURS
COMMERCIAL BANKS
The commercial banking structure in India consists of:
• Scheduled Commercial Banks in India
40
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 41/44
• Unscheduled Banks in India
Scheduled Banks in India constitute those banks, which have been included in the Second
Schedule of Reserve Bank of India (RBI) Act, 1934. RBI in turn includes only those banks in
this schedule that satisfy the criteria laid down vide section 42 (6) (a) of the Act.
As on 30th June, 1999, there were 300 scheduled banks in India having a total network of 64,918
branches. The scheduled commercial banks in India comprise of State bank of India and its
associates (8), nationalized banks (19), foreign banks (45), private sector banks (32), co-
operative banks and regional rural banks.
"Scheduled banks in India" means the State Bank of India constituted under the State Bank of
India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary
Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted under section 3 of the
Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under
section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40
of 1980), or any other bank being a bank included in the Second Schedule to the Reserve Bank
of India Act, 1934 (2 of 1934), but does not include a co-operative bank".
"Non-scheduled bank in India" means a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduled bank".
OTHER FINANCIAL INSTITUTION
Industrial development bank of India (IDBI); The Industrial Development Bank of India
(IDBI) was established on July 1, 1964 under an Act of Parliament as a wholly owned subsidiary
of the Reserve Bank of India. In February 1976, the ownership of IDBI was transferred to the
Government of India and it was made the principal financial institution for coordinating the
activities of institutions engaged in financing, promoting and developing industry in the country.
Although Government shareholding in the Bank came down below 100% following IDBI’s
public issue in July 1995, the former continues to be the major shareholder (current
shareholding: 58.47%). During the four decades of its existence, IDBI has been instrumental not
only in establishing a well-developed, diversified and efficient industrial and institutional
structure but also adding a qualitative dimension to the process of industrial development in the
41
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 42/44
country. IDBI has played a pioneering role in fulfilling its mission of promoting industrial
growth through financing of medium and long-term projects, in consonance with national plans
and priorities. Over the years, IDBI has enlarged its basket of products and services, covering
almost the entire spectrum of industrial activities, including manufacturing and services. IDBI
provides financial assistance, both in rupee and foreign currencies, for green-field projects as
also for expansion, modernisation and diversification purposes. In the wake of financial sector
reforms unveiled by the Government since 1992, IDBI evolved an array of fund and fee-based
services with a view to providing an integrated solution to meet the entire demand of financial
and corporate advisory requirements of its clients. IDBI also provides indirect financial
assistance by way of refinancing of loans extended by State-level financial institutions and banks
and by way of rediscounting of bills of exchange arising out of sale of indigenous machinery on
deferred payment terms.
LIFE INSURANCE COPPORATION OF INDIA (LIC) : The Oriental Life Insurance
Company, the first corporate entity in India offering life insurance cover was established in
Calcutta in 1818 by Bipin Behari Dasgupta and others. Europeans in India were its primary
target market, and it charged Indians heftier premiums. The Bombay Mutual Life Assurance
Society, formed in 1870, was the first native insurance provider. Other insurance companies
established in the pre-independence era included. The Corporation, which started its businesswith around 300 offices, 5.6 million policies and a corpus of INR 459 million, has grown to
2,048 offices servicing around 180 million policies and a corpus of over INR 3.4 trillion.
• Bharat Insurance Company (1896)
• United India (1906)
• National Indian (1906)
• National Insurance (1906)
• Co-operative Assurance (1906)
• Hindustan Co-operative (1907)
• Indian Mercantile
42
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 43/44
• General Assurance
• Swadeshi Life (later Bombay Life)
COCLUSION
As I m doing an analytical study on small entrepreneurial development I would loke to start this
project with a perspective of it. This perspective includes the introduction of enterpreneur,
enterpreneurship, factors al quality managementeffecting entrepreneurial growth ,
entrepreneurship in india, entrepreneurial development progeam.
After studying the perspective I work on start-up of entreprise. It includes projects, financing of
enterprises, and ownership structure. Here project includes three stages, first is project
identification, secoundly project formulation and last project appraisal.
After this I considered what the various areas from which this enterprise getting support. It
includes financial financial institution , lease, taxation benefits for small enterprises, andgovernment policy for small enterprises.
Management plays a vital role in the development of enterprises. In thid topic I’ll consider what
kind of management is necessary. Nature and scope of business, fundamentals of management,
working capital management, marketing management, human resourse management, total
quality management. The secound last step is the development of enterpreneur. Development is
generally required in small enterprises. Growth strategies and suggestion for industrial sickness.
At the end I have given an case study related to total quality management (TQM).
43
8/6/2019 Pankaj Patel Sr Celebrity_endorsement
http://slidepdf.com/reader/full/pankaj-patel-sr-celebrityendorsement 44/44
Bibliography
Books : enterpreneurship development –s.s. Khanka
Links : www.google.com
www.vikimedia.com
www.mleconsulting.com
Print media : the economic timestimes of india